Dynamic pricing for events

Back in June last year, for reasons known only to parents of other participants at the 23rd World Scout Jamboree, I found myself in a very long, snaking queue at Earls Court, London. Not only was it the longest line I have ever experienced for a venue based event of any kind, but it was also the first time I had ever waited alongside Ninjas, Lolitas and other cosplayer characters. I was seriously considering paying extra for the Sake Experience.

All of this aside – one of the key experiences for me as an event professional was the ticket purchasing process. Dependent upon when I went onto the booking site, the cost of attending the event would change, so that I was left with the feeling that the tickets could only get more expensive. Now this may not have been a deliberate ploy, i.e. there may have been a human being sitting in the back room changing their minds on a regular basis with a view to managing crowds and income, but there is no doubt that it encouraged me to part with my money sooner rather than later, even though no early-bird discount had been announced.

With this in the back of my mind I read a very interesting piece by Mark Ritson on dynamic pricing. Appearing in Marketing Week magazine, the article took many examples from consumer marketing but one particular passage is very pertinent to event organisers:

…most prices are set with a reckless disregard for event the faintest whiff of analytics. Pricing remains an entirely amateur confection in most cases. Equal parts bingo and voodoo.

For an industry that has really got to grips with the absolute intricacies of dynamic pricing you need to look no further than the airlines. Sophisticated technology enables them to ensure that every seat on every flight is delivering the best possible fare, determined by time, route and demand. These processes are changeable, enabling them to charge significantly more for just a handful of tickets, manage the volume of promotional fares available or create premium pricing on popular flights. My industry source tells me that sometimes the profit on a flight will come from the sale of the very last seat, so you can see how important this intelligent approach to pricing is.

In marketing terms, what airlines do is to announce that tickets are available from a certain price which gives them the flexibility to change according to demand. Now that most event booking processes, even for the premium rate conferences, are online and conference brochures publishing prices are rarely printed, there is a greater opportunity to change pricing according to demand. For consumer events, analysing the ticket purchasing cycle would allow clear parameters to be set regarding the number of promotional tickets being made available or indeed when to raise the ticket price to manage demand.

Any event can be sold out. The trick is to ensure that this happens with the optimum amount of revenue achieved. This is usually measured by performance against budget, but would it not be better to measure it by price v demand. It is one thing to have sold out, quite another to have done so too cheaply and too quickly. Dynamic pricing would also give a real marketing boost in terms of attracting loyal visitors to come back time and again. These individuals could be offered a ‘club’ membership where they can book tickets at a guaranteed price regardless of which day they want to attend while everyone else would need to get their skates on to get the lower prices.

Back to Hyper Japan. Not only did the ticket prices fluctuate, but they also kicked you out at lunchtime on the most popular days. Which meant that if you wanted to spend your whole day looking like a character out of a cartoon, sorry – anime, series you had to pay twice…